Justia Insurance Law Opinion Summaries

Union Pacific Railroad Company, as the corporate successor to a dissolved coal mining company, periodically received mine subsidence claims from the Illinois Mine Subsidence Insurance Fund. The Fund, acting as a reinsurer for primary insurers offering mine subsidence coverage, sought to recover its reinsurance payments from Union Pacific. After years of litigation, Union Pacific sued the Fund for declaratory and injunctive relief to preclude future cases. The Fund moved to dismiss, and the district court allowed the complaint seeking injunctive relief to proceed on certain theories but not others. Union Pacific brought an interlocutory appeal.The United States District Court for the Central District of Illinois had previously ruled that Union Pacific could seek declaratory and injunctive relief for subsidence claims acquired by the Fund before the Gillespie case and the 2019 Opinion but not for future claims. Union Pacific amended its complaint, and the district court reiterated its earlier decision, dismissing the request for future injunctive relief while allowing the case to proceed on the earlier claims.The United States Court of Appeals for the Seventh Circuit reviewed the case and concluded that it lacked appellate jurisdiction. The court determined that the district court's order was a narrowing of the injunctive relief rather than a definitive refusal. The court also found that the injunctive relief sought on appeal was not substantially different from the relief still pending in the district court. As a result, the appeal was dismissed. View "Union Pacific Railroad Co. v. Illinois Mine Subsidence Insurance Fund" on Justia Law

Fire-Dex, a manufacturer of personal protective equipment for firefighters, faced lawsuits from firefighters and their spouses alleging exposure to carcinogens from Fire-Dex's products. These lawsuits were consolidated in multidistrict litigation in South Carolina. Fire-Dex had general commercial liability insurance policies with Admiral Insurance Company and requested Admiral to defend and indemnify it against the lawsuits. Admiral refused, leading to a declaratory judgment action in federal court in Ohio, where the district court declined to exercise jurisdiction.The United States District Court for the Northern District of Ohio initially had diversity jurisdiction over Admiral's declaratory judgment action but chose to abstain from exercising it, a decision affirmed by the Sixth Circuit. Subsequently, Fire-Dex filed a lawsuit in Ohio state court seeking a declaration that Admiral must defend and indemnify it, along with compensatory and punitive damages for breach of contract and bad faith. Admiral removed the case to federal court and filed counterclaims for declaratory judgment. Fire-Dex moved to remand the case to state court.The United States Court of Appeals for the Sixth Circuit reviewed the district court's decision to remand the declaratory claims and stay the damages claims. The Sixth Circuit held that the district court erred in abstaining from the declaratory claims under Thibodaux abstention, as the case did not involve unsettled questions of state law intimately involved with state sovereignty. The court also found that abstaining from the declaratory claims was an abuse of discretion because the declaratory and damages claims were closely intertwined, and no traditional abstention doctrine applied to the damages claims. The Sixth Circuit vacated the district court's order and remanded for further proceedings. View "Fire-Dex, LLC v. Admiral Insurance Co." on Justia Law

Plaintiff purchased a rural property in Santa Cruz County, which was accessed via a private road crossing his neighbor's property. A dispute arose when the neighbor claimed an easement over the road, leading to increased traffic due to marijuana cultivation. The neighbor filed two lawsuits asserting an easement, both of which were dismissed without prejudice. Plaintiff then sued to quiet title, and the neighbor cross-complained, asserting an easement based on a 1971 deed. The trial court ruled in favor of the neighbor, finding an express easement, a decision affirmed on appeal.Plaintiff funded his defense using retirement savings after Chicago Title Insurance Company, his title insurer, denied his tender for defense, citing policy exclusions. Plaintiff sued Chicago Title for breach of contract and bad faith. The trial court found Chicago Title had a duty to defend from the initial tender but rejected Plaintiff's bad faith claim and request for punitive damages. The court awarded damages for the diminution in property value but denied damages for periods outside the litigation.On appeal, the California Court of Appeal, Sixth Appellate District, found that Chicago Title acted in bad faith by failing to defend Plaintiff despite the potential for coverage indicated by the 1971 deed. The court reversed the trial court's judgment on the bad faith claim and remanded for a determination of damages resulting from the breach of the implied covenant of good faith and fair dealing. The court affirmed the trial court's denial of punitive damages and its award of prejudgment interest on the additional diminution in value. The case was remanded for further proceedings consistent with the appellate court's findings. View "Bartel v. Chicago Title Insurance Co." on Justia Law

Jacey Lee Orlando was a passenger in an all-terrain vehicle (ATV) that overturned in California’s Imperial Sand Dunes, causing serious injury to her leg. The driver’s insurer paid Orlando the liability policy limit, which was insufficient to cover her injuries. Orlando then filed a claim with her insurer, State Farm, under her underinsured motorist (UIM) policy. State Farm denied coverage, stating that the ATV was not an “underinsured motor vehicle” under the policy because it was designed for use primarily off public roads and the accident did not occur on a public road. State Farm subsequently filed for a declaratory judgment to confirm that the policy did not provide UIM coverage for the ATV accident. Orlando counterclaimed for breach of contract.The Superior Court in Maricopa County granted summary judgment in favor of State Farm, concluding that the ATV was not an “underinsured motor vehicle” under the policy and that the policy’s exclusion was valid. Orlando appealed, and the Court of Appeals reversed the decision, holding that the UIM provision of the Uninsured/Underinsured Motorist Act (UMA) did not permit excluding coverage for the ATV accident.The Supreme Court of the State of Arizona reviewed the case to determine whether the UMA requires insurers to provide UIM coverage for accidents involving vehicles designed primarily for off-road use and that do not occur on public roads. The court held that the UMA does not require coverage for ATVs not operated on public roads and that an insurer may preclude such coverage in a UIM policy. The court vacated the Court of Appeals' decision and affirmed the Superior Court’s summary judgment in favor of State Farm. View "STATE FARM AUTOMOBILE v ORLANDO" on Justia Law

Towers Watson & Co. (Towers Watson) was insured under a directors and officers (D&O) liability policy by National Union Fire Insurance Company of Pittsburgh, PA (National Union) and had excess coverage from other insurers. Following a merger with Willis Group Holdings plc (Willis), Towers Watson shareholders filed class actions alleging that the merger consideration was inadequate due to a conflict of interest involving Towers Watson’s CEO. The shareholders settled for $90 million, and Towers Watson sought indemnity coverage under the D&O policy. The insurers denied coverage, citing the policy’s “bump-up exclusion,” which excludes coverage for settlements that effectively increase the consideration paid for an acquisition.The United States District Court for the Eastern District of Virginia initially granted summary judgment in favor of Towers Watson, finding that the merger did not involve an acquisition within the meaning of the bump-up exclusion. The insurers appealed, and the United States Court of Appeals for the Fourth Circuit vacated and remanded, clarifying that the merger did involve an acquisition. On remand, the district court held that the bump-up exclusion applied, barring indemnity coverage for the settlement, and granted summary judgment in favor of the insurers.The United States Court of Appeals for the Fourth Circuit reviewed the case and affirmed the district court’s decision. The court held that the settlements represented an effective increase in the consideration paid for the merger, thus triggering the bump-up exclusion. The court also upheld the district court’s application of the common fund doctrine, concluding that the entire settlement amount, including the portion allocated to attorneys’ fees, fell within the exclusion. Consequently, Towers Watson was not entitled to indemnity coverage under the D&O policy. View "Towers Watson & Co. v. National Union Fire Insurance Co." on Justia Law

A group of businesses and individuals in the vision care industry challenged Texas House Bill 1696, which regulates managed vision care plans by limiting the information these plans can provide to their enrollees. The plaintiffs argued that the bill imposed unconstitutional burdens on their rights of commercial speech, associational freedom, and equal protection under the First and Fourteenth Amendments. They sought a preliminary injunction to prevent the bill's enforcement and the defendants, Texas officials, moved to dismiss the case, claiming sovereign immunity.The United States District Court for the Northern District of Texas denied the defendants' motion to dismiss and granted the preliminary injunction. The court found that the plaintiffs were likely to succeed on their commercial speech claims and that the equities favored a preliminary injunction. The defendants appealed both the denial of their sovereign immunity defense and the grant of the preliminary injunction.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court affirmed the district court's decision to deny the motion to dismiss as it related to Texas Insurance Commissioner Cassie Brown, finding that she had a specific duty to enforce the statute. However, the court vacated the denial of the motion to dismiss as it related to Governor Greg Abbott and Attorney General Ken Paxton, determining that they did not have a sufficient connection to the enforcement of the statute. The court also affirmed the preliminary injunction against Commissioner Brown, concluding that the plaintiffs were likely to succeed on their commercial speech claim and that the balance of equities favored the injunction. The court vacated the preliminary injunction as it applied to Governor Abbott and Attorney General Paxton and remanded the case for modification of the orders. View "Healthy Vision Association v. Abbott" on Justia Law

Daniel Jones signed a blank application for a homeowner’s insurance policy, trusting his agent, J. Kim Hatcher Insurance Agencies, Inc. (Hatcher), to complete it accurately. Jones relied on Hatcher’s assurance based on their prior dealings and the commission Hatcher would earn. After Hurricane Florence destroyed Jones’s home, his insurer refused to cover the losses, citing material misrepresentations in the application. Jones discovered that Hatcher had omitted the existence of a pond and understated the property size.Jones sued Hatcher for negligence and gross negligence, among other claims. Hatcher moved to dismiss the ordinary negligence claim under Rule 12(b)(6), arguing contributory negligence. The trial court granted Hatcher’s motion, but the Court of Appeals reversed, finding that dismissal was not warranted as the complaint did not necessarily defeat Jones’s claim for ordinary negligence. The Court of Appeals also affirmed the dismissal of Jones’s claim for punitive damages.The Supreme Court of North Carolina reviewed the case. It agreed with the Court of Appeals that Jones’s complaint did not show contributory negligence as a matter of law, as the factual circumstances could support that Jones acted with ordinary prudence in trusting Hatcher. The court also found that Jones’s complaint sufficiently alleged a claim for punitive damages based on Hatcher’s willful and wanton conduct, giving Hatcher adequate notice of the claims. Therefore, the Supreme Court affirmed the Court of Appeals’ decision on the contributory negligence issue and reversed its decision on the punitive damages issue. View "Jones v. J. Kim Hatcher Ins. Agencies, Inc" on Justia Law

Several estates filed a lawsuit against Tyson Foods Inc. and several of its corporate executives and plant supervisors, alleging gross negligence and fraud after four former workers at Tyson Foods’ pork processing plant in Waterloo died from COVID-19. The plaintiffs claimed that Tyson failed to implement adequate safety measures and misled workers about the risks of COVID-19, leading to the workers' deaths.The Iowa District Court for Black Hawk County dismissed the case, concluding that Iowa’s Workers’ Compensation Act (IWCA) provided the exclusive remedy for the estates’ claims, thus lacking subject matter jurisdiction. The court found that the plaintiffs did not sufficiently plead gross negligence to fall within an exception to the IWCA and that the claims were improperly "lumped" together without specifying each defendant's duty or claim.The Iowa Supreme Court reviewed the case and held that the plaintiffs had sufficiently pleaded gross negligence against the executive and supervisor defendants, thus falling within the IWCA’s exception. The court found that the petition provided fair notice of the claims and that the allegations met the elements of gross negligence: knowledge of the peril, knowledge that injury was probable, and a conscious failure to avoid the peril. The court also held that the fraudulent misrepresentation claims against the supervisor defendants were not preempted by the IWCA, as intentional torts fall outside its scope.However, the court affirmed the dismissal of the claims against the corporate defendants, Tyson Foods and Tyson Fresh Meats, as the IWCA’s exclusivity provisions barred any direct tort claims against employers. The court also affirmed the dismissal of the breach-of-duty claims against Adams and Jones due to waiver. The case was remanded for further proceedings consistent with the court’s opinion. View "Mehmedovic v. Tyson Foods Inc." on Justia Law

J.H. participated in an employee welfare-benefit plan insured by Anthem Blue Cross Life and Health Insurance Company, with her son, A.H., as a beneficiary. After seeking benefits for A.H.'s yearlong stay at a mental-health treatment center, Anthem denied coverage, and Plaintiffs' appeal to Anthem was unsuccessful. Over a year after their final appeal through Anthem was decided, Plaintiffs filed a lawsuit to recover benefits under § 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 (ERISA).The United States District Court for the District of Utah dismissed the action, concluding it was time-barred under a provision of the Plan that required civil actions under ERISA § 502(a) to be brought within one year of the grievance or appeal decision. Plaintiffs argued that another sentence in the Plan set a three-year limitations period, creating an ambiguity that should be interpreted in their favor.The United States Court of Appeals for the Tenth Circuit reviewed the case and held that the two provisions were not inconsistent and both applied. The court explained that the one-year limitations period for § 502(a) actions and the three-year limitations period for other actions were distinct and could both be applicable. The court affirmed the district court's dismissal, concluding that Plaintiffs' action was time-barred as it was filed beyond the one-year limitations period specified in the Plan. View "J.H. v. Anthem Blue Cross Life and Health Insurance" on Justia Law

Melvin G. Welch died in 2023 from mesothelioma caused by asbestos exposure. His widow, Donna B. Welch, sued Atlas Turner, Inc. and other defendants, alleging their products caused his death. Atlas Turner, a Canadian company, produced and sold asbestos insulation, which was shipped to South Carolina. Welch was likely exposed to these products while working in Greenwood, South Carolina. The case was brought in Richland County and assigned to Judge Jean H. Toal, who oversees the South Carolina asbestos docket.Atlas Turner moved to dismiss the claims for lack of personal jurisdiction, but the trial court denied the motion and ordered Atlas Turner to participate in discovery. Atlas Turner ignored deposition notices and refused to comply with discovery orders, claiming it had no knowledgeable witnesses and that the Québec Business Concerns Records Act (QBCRA) prohibited it from disclosing information. The trial court held Atlas Turner in contempt, struck its answer, and placed it in default. The court also appointed a Receiver over Atlas Turner's Insurance Assets.The South Carolina Supreme Court reviewed the case and affirmed the trial court's sanctions and the appointment of the Receiver over Atlas Turner's Insurance Assets. The court found that Atlas Turner's refusal to comply with discovery was willful and that the QBCRA did not excuse its non-compliance. The court also held that the trial court had the authority to appoint a Receiver before judgment due to Atlas Turner's conduct, which indicated an intent to evade responsibility. However, the Supreme Court reversed the portion of the Receivership order that granted the Receiver authority beyond investigating and collecting Atlas Turner's Insurance Assets. View "Welch v. Atlas Turner, Inc." on Justia Law